Wolfe downgrades Fiserv to Peer Perform amid structural questions

As previously reported, Wolfe Research downgraded Fiserv (FI) to Peer Perform from Outperform and removed the firm’s prior $160 price target on the shares following Q3 results and a guidance cut that it says “raised structural concerns.” While the firm notes it was “tactically cautious” and previewed a potential guidance cut, it says the combination of materially weaker Q3 results across segments, the company’s acknowledgment that organic Merchant growth has been mid-single digit since 2023 rather than the double-digit growth presented prior, acknowledgment of several short-term and unsustainable levers used at the company in recent years that need to be reversed, and the investment required to stabilize the business lead the firm to see “too much uncertainty in the medium-term through a necessary transition period,” the analyst tells investors.